Not having a public option in the Obama health care reform bill is good for the the larger managed care group, says health care analyst Thomas Carroll of Stifel Nicoluas.
"I don't think the public option will be in the final bill and getting rid of it is a positive for firms like UnitedHealth Group, and Wellpoint," Carroll said. "The idea of the public option hurt these stocks earlier in the year, but they've recovered."
Carroll also said that if you don't own UnitedHealth now, that the strategy would be to wait and if you do, to hold.
"We are kind of in limbo in regards to the back and forth on what will be in the bill," said Carroll. But if there is a public option, all managed care firm will be hurt but the bigger ones will be in a better position."
"In the short term, expect to see a lot of ups and downs with health care firms, " Carroll said.
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Carroll does not own shares of UNH.
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